Weighing ethics

What are three ethical questions nonprofits and their boards should be asking themselves?

Answer:

* Do we fulfill our public purpose well?

The most important obligation a charity has is to serve society through its mission. A university needs to serve students, a homeless shelter needs to provide beds for those without them, and a hospital needs to care for the ill.

Every year the board should evaluate the charity’s activities – not just its accomplishments – to decide how closely the charity is adhering to its core purpose.

The charity should also use that evaluation to revisit the question of its vision.

* Are our gift acceptance policies adequate?

The document entitled “Gift Acceptance Polices” is a moral document. It is not the mere regurgitation of the mechanics of a gift. Although it must include the mechanics of a charity’s way of doing things so donors will know how things work, it also needs to explain why the charity does some things.

An example is whether the charity will act as trustee of a split-interest gift. If it does, it needs to explain why it is competent to undertake the role.

Another example is whether any gifts are not accepted. If the charity does not accept money from the tobacco industry, it needs to explain why. Ethics isn’t the compliance with the cliché of the day, but a thoughtful examination of why decisions are made.

* Are we disclosing what we should to the public?

Aside from what is in their annual reports, charities for some reason often feel that what they do isn’t anybody’s business. Charities are public entities – they use public dollars to survive – and so must do more than rely on the 990 or even the annual report to communicate their work.

It doesn’t matter that only so much disclosure is required by law. As ethics is the “obedience to the unenforceable” – and charities ought to be ethical organizations – boards and senior staff need to ask themselves how they can better convey their work.